Without admitting or denyingthe findings, Wealthfront agreed to pay a $250,000 penalty.Hedgeable agreed to an $80,000 penalty, also without admitting ordenying the agency's findings.
(Bloomberg) –The U.S. Securities and Exchange Commission filedits first-ever enforcement actions against robo-advisers, accusing Wealthfront Advisersand another firm of making false statements about investmentproducts and publishing misleading advertisements.
|Related: How do you beat a robo-advisor?Trust
|Wealthfront, a robo-adviser with more than $11 billion in clientassets under management, made false statements over a three-yearperiod about a tax-loss harvesting strategy it offered to clients,the SEC said in a statement Friday.
|The agency also said the firm broke rules in re-tweeting clienttestimonials, paying bloggers for referrals and failing to maintaina compliance program sufficient to prevent violations of thesecurities laws.
|Hedgeable Inc., a New York-based robo-adviser with approximately$81 million in client assets under management, was separatelyaccused by the SEC of making a series of misleading statementsabout performance comparisons from 2016 until April 2017.
|“Technology is rapidly changing the way investment advisers areable to advertise and deliver their services to clients,” said C.Dabney O'Riordan, chief of the SEC Enforcement Division's AssetManagement Unit. “Regardless of their format, however, all advisersmust take seriously their obligations to comply with the securitieslaws, which were put in place to protect investors.”
|Without admitting or denying the findings, Wealthfront agreed topay a $250,000 penalty. Hedgeable agreed to an $80,000 penalty,also without admitting or denying the agency's findings.
|Attorneys for Wealthfront and Hedgeable didn't immediatelyrespond to requests for comment.
|READ MORE:
|Changes likely in store with rise ofrobo-advisors
|Robo-advisor startups going after wealthycustomers
|Meet the human behind the robo
|Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.
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